TaxTMI 
TaxTMI 
2020 (10) TMI 456
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....e assessee is that the initiation of revision proceeding is without authority of law and jurisdiction. 2. The facts relating to the case are stated in brief. The assessment in the hands of the assessee was completed by the assessing officer, being Assistant Commissioner of Income tax, Circle-5(1)(1), Bangalore on 30-01-2017 for assessment year 2012-13. The company was amalgamated with M/s NXP India (P) Ltd, New Delhi. Hence the Ld Pr. CIT-06, New Delhi called for assessment record and took the view that the assessment order is erroneous and prejudicial to the interests of revenue. Accordingly he initiated revision proceedings u/s 263 of the Act. 3. The facts, which led the Ld Pr. CIT to form such a view are stated in brief. The assess....
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....ot be passed in order to add back the principal amount of Rs. 1,09,85,585/- by disallowing the same as capital expenditure as per the provision of sec.37, after allowing depreciation thereon. 5. Before Ld Pr. CIT, New Delhi, the assessee furnished a letter dated 21.3.2019, wherein the assessee primarily contended that the Ld Pr. CIT, New Delhi does not have jurisdiction over the assessee, since the registered office of the assessee company is in Bangalore and hence it falls under the jurisdiction of Ld Pr. CIT-5, Bangalore. 6. Ld Pr. CIT, New Delhi noticed that the assessee's name was earlier "Freescale Semiconductor India P Ltd with the same PAN number and later its name was changed and merged with M/s NXP India Ltd. The assessee has....
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....sset and the lessor is entitled to claim depreciation under the Income tax Act, as per the decision rendered by Hon'ble Supreme Court in the case of ICDS Ltd vs. CIT, Mysore (2013)(29 taxmann.com 129)(SC). Hence, the assessee, being a lessee, is not entitled to claim depreciation on the assets taken on lease. He submitted that the assessee, being limited company, is required to mandatorily follow the Accounting Standards issued by the Institute of Chartered Accountants of India. The assessee has followed Accounting Standard -19 for book purposes, as per which it is required to capitalise the value of leased assets and claim depreciation thereon along with the interest component. 10. The Ld A.R further submitted that the assessee, vide it....
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....ayments amounting to Rs. 1,09,85,585/- since the same is not debited to the profit and loss account (working for the same is enclosed as Annexure 4). We also submit that the Company has not claimed tax depreciation on such leased assets since the Company is not the owner of the said assets." The ld A.R, accordingly, submitted that the AO has applied his mind and accepted the method followed by the assessee for book purposes and income tax purposes. Accordingly, he submitted that the view taken by the AO on this issue is one of the possible views and hence the impugned revision proceedings is liable to be quashed. 11. The Ld A.R invited our attention to the notice issued by Ld Pr. CIT u/s 263 of the Act and submitted that the Ld Pr. CI....
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....der should be sustained. 13. In the rejoinder, the Ld A.R submitted that the assessee has furnished depreciation schedule for both book purposes and income tax purposes. He submitted that these schedules would show that the assessee has not claimed depreciation on leased assets under Income tax purposes. On examination of both the depreciation schedules, the bench pointed out that the quantum of addition of assets (other than leased assets) is lesser in the depreciation schedule prepared for book purposes, while it is shown more in the depreciation schedule prepared for income tax purposes. The ld A.R submitted that he will furnish a detailed reconciliation statement. He reiterated that the AO has taken a possible view and hence the impu....
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....t that the assessee has not claimed depreciation under the Income tax Act. Accordingly, we are of the view that the observations made in paragraph 2 appears to be a typographical mistake. 16. As per the decision rendered by Hon'ble Supreme Court in the case of Malabar Industrial Co. Ltd (243 ITR 83), revision proceedings shall lie, if the assessment order is erroneous and prejudicial to the interests of revenue. Explanation 2 to sec. 263 (1) of the Act inserted by Finance Act, 2015 w.e.f. 1.6.2015 deems an assessment order to be erroneous and prejudicial to the interests of revenue if, in the opinion of the Principal Commissioner or Commissioner, the order is passed without making inquiries or verification which should have been made or ....